Business Intelligence Software Deal at Heart of Former Massachusetts Official's Indictment

Former Massachusetts House Speaker Salvatore F. DiMasi indicted for rigging an IT contract involving a large purchase of sophisticated software.

Tuesday's indictment of former Massachusetts House Speaker Salvatore F. DiMasi and three others for rigging a state software contract sent shockwaves through the political world that swirls around Beacon Hill in Boston. But beyond the "stunning" news of political corruption, the event brings back to the surface a strange tale of an unusual IT contract.

DiMasi and his three associates have been charged by a federal grand jury for running a scheme involving the sale of business intelligence (BI) software licenses worth $13 million software from Cognos (now owned by IBM), according to The Boston Globe. All four "received significant payouts when the contract was signed by the state" in 2007.

When Gov. Deval Patrick's CIO, Anne Margulies, canceled the deal in March 2008 -- originally because the contract did not follow state procurement rules -- many in the government IT arena raised their eyebrows at the size and scope of the software purchase. Why was the state buying a sophisticated software management tool for 20,000 users? At the time, the next largest government deal involving Cognos software was with the state of Ohio for 6,000 seats, worth $2.9 million, according to the Globe.

The Quinn Report

In 2005, Massachusetts conducted an analysis, which recommended the use of some BI software, but on a much smaller scale. The report did not mention Cognos at all and recommended other vendors. The report was commissioned by former state CIO Peter Quinn, who resigned in the midst of an unrelated controversy involving open source software and Microsoft. He was replaced by Bethann Pepoli, who was state CIO under former Gov. Mitt Romney and Patrick.

Pepoli told investigators that DiMasi pressed the administration in 2006 to purchase the exact kind of software that Cognos produced, according to reports in the Globe.

The Quinn report that looked at the use of BI software in the state suggested that no more than 10 percent of the state's workers would need access to the kind of software produced by Cognos and other BI vendors. However, the 20,000 seat license the state ended up purchasing represented about 25 percent of the state's workforce.

After the deal was rescinded in 2008, IBM returned the $13 million to Massachusetts.